Consumer Sector Stocks: Last Week’s Biggest Losers



Top losers

After the market closed on September 19, the New Jersey–based retail company Bed Bath & Beyond (BBBY) announced its fiscal 2Q17 results. Earnings of $0.67 per share in 2Q17 disappointed investors, missing analysts’ estimate of $0.95. Earnings fell ~40.0% year-over-year. Revenue of $2.9 billion also missed estimates by 2.3% and fell 1.7% YoY in 2Q17. Various brokerage firms cut their target prices for the stock after the results we discuss later in this series. The drastic decline in earnings pulled the stock down 21.5% last week and ~45.0% year-to-date as of September 22.

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Processed and packaged goods company General Mills (GIS) announced its results for fiscal 1Q18 on September 20 before the market opened. Revenue in the first quarter fell 4.0% YoY to $3.7 billion. Earnings also fell 9.0% to $0.71 per share. Both EPS and revenue in 1Q18 missed estimates by 6.5% and 0.79%, respectively. The decrease in revenue and earnings affected the stock. It fell 8.2% last week and 17.1% year-to-date as of September 22.

On September 19, Piper Jaffray analyst Michael Lavery downgraded Kellogg Company (K) to “neutral” from “overweight” and reduced its target price from $78 to $72. The downgrade came on the back of Kroger Company’s (KR) announcement of a space optimization program during its earnings conference call. The analyst mentioned that since grocery companies are planning to add more private-label items to their shelves, this move could threaten Kellogg as Kroger accounts for around 8% of Kellogg’s total sales. Kroger’s stock was down 6.6% last week while Kellogg’s shares fell 7.3%.

On September 19, Wells Fargo downgraded Under Armour (UA)(UAA) stock to “underperform” from “market perform” and cut its target price to $13 from $17. Of the analysts surveyed, 21% of analysts rated the stock a “buy” while 53% rated it a “hold” and 26% rated it a “sell.” Under Armour stock fell 8.6% last week.

Mattel (MAT) stock fell 8.4% last week after reports that Toys “R” Us filed for bankruptcy. On September 21, Jefferies also cut its target price for Mattel’s stock to $14 from $17. On September 22, D.A. Davidson cut its target price to $13 from $14.


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